Protecting your Future: Compromise could revamp long-term care

One aspect of the "compromise bill" passed this month to avert the fiscal cliff may eventually affect planning for long-term care costs in New York.

Bonnie Kraham

One aspect of the "compromise bill" passed this month to avert the fiscal cliff may eventually affect planning for long-term care costs in New York.

While it does not have any immediate effects, it is important to discuss as it could lead to proposals down the road to tackle the problem of paying for long-term care. Specifically, a portion of the compromise bill did two things: It formally ended the CLASS Act and created a federal commission to study the issue of financing senior care. Both components are worth discussing more fully.

First, the CLASS Act was a bill passed as part of the comprehensive health care law of 2010. The idea was to create a voluntary, national long-term care insurance program. Elder law attorneys frequently share information on the merits of long-term care insurance, as it is often the premier way for seniors to ensure they receive high-quality care in whatever manner is best for them with minimal disruption of their lives. The major downside, of course, is the cost, which can be prohibitive to many.

Those same cost concerns seem to have been the main problem with the CLASS Act as well. Even though the law was passed in 2010, it had essentially already been abandoned by even its supporters before this formal termination via the fiscal cliff compromise bill. Actuaries had determined the program to be far too expensive for most residents to participate in.

Alternatively, however, a federal long-term care commission was created with the stated purpose to plan "for the establishment, implementation and financing of a comprehensive, coordinated and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports "» and individuals desiring to plan for future long-term care needs."

At first blush, this seems like a welcome mission, as the inherent difficulty of planning for and paying for these costs has long been documented. Far too many families continue to do no planning whatsoever, creating a far more serious problem down the road when long-term care is unavoidable.

However, some skeptics are worried that the commission will lead to little real policy change. That is because the commission has a strict turnaround time of six months for proposals. Even then, Congress is not required to vote on, let alone pass, any of the proposals suggested by the commission. Therefore, we will have to wait and see if anything with real impact for local residents actually comes out of these components of the compromise bill.

Bonnie Kraham is an attorney practicing elder law estate planning with Ettinger Law Firm, 75 Crystal Run Road, Town of Wallkill. She can be reached at 692-8700, ext. 119 or at bkraham@trustlaw.com. This column is intended to provide general information, not legal advice.